Senate Dems look to have it both ways on 1099 repeal

Trying to thwart a Republican repeal of the health reform law's 1099 tax reporting requirements, Senate Democrats are working on an amendment that could kill the proposal down the road.

Sen. Robert Menendez (D-N.J.) has crafted a second-degree amendment to Nebraska Republican Sen. Mike Johanns’s 1099 repeal amendment that would require an Obama administration study to see how the Republicans' amendment would affect small businesses’ premium prices and access to coverage, sources tell POLITICO.

According to a copy of the amendment, if the study finds that the Republican pay-for increases costs or reduces access, the 1099 repeal would go into effect but it would not be paid for.

The second-degree amendment gives fellow Democrats cover to vote on the Johanns amendment while most likely not allowing it to go into effect.

The Johanns amendment, which is the same as a bill the House passed earlier this month, would be paid for by changing the way tax subsidies are recollected if consumers experience a change in income during the tax year. It requires consumers to repay more of the tax subsidies than Democrats would like. They argue it could require consumers at the brink of eligibility to repay their entire subsidy — up to $12,000 for a family of four — if their income increases over the course of the year to make them no longer eligible.

A small group of Senate Democrats, including Menendez, tried to make the case to other Democrats to vote against the Johanns amendment. But those efforts — as well as efforts to come up with an alternative pay-for — appear to have been unsuccessful.

The amendments would be attached to the Senate’s reauthorization of two small-business programs. The Senate plans to continue debate on the bill this week.